Committee Oversight Report on Gauteng, Mpumalanga, Limpopo illegal mining; Committee Operational Plan

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Mineral Resources and Energy

31 May 2017
Chairperson: Mr S Luzipho (ANC)
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Meeting Summary

Document handed out:
Committee Oversight Report on Gauteng, Mpumalanga, Limpopo illegal mining [available under Tabled Committee Reports once published]

The Committee considered its operational plan for 2017 to 2019, and adopted an oversight report to Gauteng, Mpumalanga and Limpopo on illegal mining and minutes of 24 May 2017.

The Content Advisor, took the Committee through the Operational Plan.  South Africa’s Gross Domestic Product growth was expected to lag behind global growth for the next three years, especially in the mining sector as it made up a third of the economic activity of South Africa. SA had and continued to record a 0.3 growth rate whilst the region recorded approximately 1.3.
 
The copper price was used globally as an economic trends indicator because of the variety of products produced using copper, and the price of gold was used as an indicator of economic activity in SA.

The economic context for mining 2017 to 2019 and beyond, the SA economy was underperforming as Gross Domestic Product growth was half the expected global growth.

The Committee Researcher took the Committee through the Operational Plan. There was a need for a roadmap from the Department of Mineral Resources as to when it planned bringing the 4 pieces of legislation to the Committee.

The Chairperson had indicated previously that simply receiving answers from the Department was not an indication of Committee effectiveness
 
The Committee had held a breakaway session in 2014 where a list of concerns to be followed up on had been drawn. By and large the list had been used and adhered to over the last three years however; the Department had frequently been unable to oblige the Committee with presentations on the subjects the Committee had requested on the dates of the requests. That had led to the agendas of the Committee to lack integrity and focus on non-planned issues. Follow-up on issues had also been rare and delayed, which affected the efficacy of the Committee’s work. The proposal therefore was that planned investigation could take place over several meetings, including linking those with oversight visits, inviting public submissions and holding hearings, even colloquiums could be explored as they had been used by the Committees on Environmental Affairs and that of Trade and Industry successfully most recently. Colloquiums had the advantage of opening up the Committee to a wider range of views. Curiously the Department scored very highly on all the measures put in place by the Office of the Auditor-General of South Africa measuring its performance, but as already pointed out the mining industry in SA was in an acute crisis. Possibly colloquiums could afford the Committee a better understanding of what was wrong in the mining sector which could be better managed by Department in improving the situation.

There was also the need to amend compensation legislation for occupational health for mine works that contracted pulmonary diseases. Though the Department had promised to have completed the amendments by 2016 December; that had not occurred yet.

Though the Committee would have urgent issues arising during planned investigations, it had to attend to urgent matters without disrupting planned work. Furthermore; though the Committee would be dealing with urgent matters as sub-agenda items it was suggested that the Committee had to avoid including too many urgent issues from the mining sector such that its planned agenda would get side-lined.

The Committee asked why its secretary would have to be mandated to communicate Committee resolutions to the Department when its Parliamentary Liaison Officer often attended Committee meetings.
How would the Committee manage to avoid prioritising urgent issues in a way that they would not disrupt planned investigations?
There was consensus that the Committee had to determine how the Department granted mining licences in environmentally sensitive areas.
On compensation when a mine disrupted activities of surface occupiers; there was a section in the Mineral and Petroleum Resources Development Act that obligated the Minister of Mineral Resources to compensate said occupiers, as their activities would have been interrupted by mining activities. However; the Committee was not aware how that process was determined, including the computation of the monies.
The Committee wondered what the role of mine inspectors was in relation to mine closures; especially as there had been frequent mining disasters.

On the oversight report to Gauteng, Mpumalanga and Limpopo on illegal mining, the Committee had recommended that there was a need for engagement with traditional leadership on what would constitute constitutional issuing of mining licenses for chrome mining; particularly on land in the custody of traditional leadership. Additionally, the Committee had spoken to a need of strengthening of customs and duties control when chrome was leaving SA at the border gates.
The draft report was adopted with technical and grammatical amendments.

Minutes of Committee meeting held on 24 May 2017were adopted with substantive amendments relating to attendance of Committee meetings by Members.
 

Meeting report

Opening remarks
The Chairperson reported on a bereavement which one of the Committee members had suffered and thus the member had submitted an apology.

iNkosi Z Mandela (ANC) noted that the EFF’s members of the Committee were absent without an apology again.

The Chairperson asked for the Committee contribution on iNkosi Mandela’s note about the absence of the EFF member repeatedly without an apology. As the Committee were not voluble on the matter he suggested that the matter be dealt with during consideration of minutes.

Amended Operational Plan for the PC on Mineral Resources 2017 to 2019
Mr N Kweyama, Content Advisor, took the Committee through the presentation.

Mr M Matlala (ANC) interjected that what was being presented was not in the presentation packs the Committee had been given

Dr Martin Nicol, Committee Researcher, replied that indeed the first three slides of the presentation had been added at a later stage and there were no copies with the staff at that time.

The Chairperson allowed Mr Kweyama to continue, the staff to prepare the slides and supply them to them Committee as the presentation continued.

Global vs SA GDP Growth
Mr Kweyama said that SA GDP growth was expected to lag behind global growth for the next three years especially in the mining sector as it made up a third of the economic activity of South Africa (SA). SA had and continued to record a 0.3 growth rate whilst the region within where it was located recorded approximately 1.3.

The copper price was used globally as an economic trend indicator because of the variety of products produced using copper. The price of gold was used as an indicator of economic activity in SA.

Situational Analysis
The economic context for mining 2017 to 2019 and beyond

The SA economy was underperforming as GDP growth was half the expected global growth.

Overview of the Operational Plan
This part of the presentation had two sections, one of which he would not present, as it provided the background for the Committee from Parliament’s point of view and was actually an update from the previous operational plan.

Legislation
There was a need for a roadmap from the Department of Mineral Resources (DMR) as to when it planned bringing the 4 pieces of legislation it had told the Committee about; to the Committee. Judge Tuchten, in 2012 had said the Mineral and Petroleum Resources Development Act (MPRDA) had generally not been framed with the care that attended to drafting of National Legislation in SA, in other words, the record of legislation in the mining sector had been found to be delayed, as the Committee was aware, and inadequate in some respects.

Budget Cycle
Simply receiving answers from the DMR was not an indication of Committee effectiveness. He had included in his presentation some slides from the first, second, third and fourth quarterly expenditure report together with the Annual Report of the DMR from the previous financial year (FY). The second quarter, which the Committee was currently in, would deal with the first quarterly report, so that the third quarter report would deal with the Budgetary Review and Recommendation Reports (BRRR) followed subsequently in the final and fourth quarter by the State of the Nation Address (SoNA) and the third quarterly report of the DMR.

Planned Investigations    
The Committee had held a breakaway session in 2014 where a list of concerns to be followed up on had been drawn. By and large the list had been used and adhered to over the last three years, however; the DMR had frequently been unable to oblige the Committee with presentations on the subjects the Committee had requested on the dates of the requests. That had led to the agendas of the Committee to lack integrity and focus on non-planned issues. Follow-up on issues had also been rare and delayed which affected the efficacy of the Committee’s work. It was evident that research had been undertaken to compile the plan by the Committee staff. That had been based on how Parliaments in other nations dealt with measuring effectiveness of Committees and staff had looked at the British Parliament in that regard. According to Dr Hanna White, who published research on the British Parliament; Committees in Parliamentary systems were notoriously poor in follow-up on issues raised. Too often a Department could be confident that the assertions it made in response to a Committee report would not be followed-up.
 
The proposal therefore was that planned investigation could take place over several meetings, including linking those with oversight visits, inviting public submissions and holding hearings, even colloquiums could be explored as they had been used by the Committees on Environmental Affairs and that of Trade and Industry successfully most recently. Colloquiums had the advantage of opening up the Committee to a wider range of views. Curiously the DMR scored very highly on all the measures put in place by the Office of the Auditor-General South Africa (AGSA) measuring its performance but as Mr Kweyama had already pointed out the mining industry in SA was in an acute crisis. Possibly colloquiums could allow the afford the Committee a better understanding of what was wrong in the mining sector which could be better managed by DMR in improving the situation.
Secondly; it was suggested that the Committee Secretary be required to communicate formal Committee resolutions that related to the DMR to the DMR’s Parliamentary liaison officer (PLO) as soon as the relevant minutes would have been adopted.

The suggested planned investigations examples were exactly that but the Committee had to agree on what issues it would like to follow-up and focus on and those issues could never be 40 but rather up to six considering the period from the day of the meeting until the 2019 general elections. For example; the Committee could want investigated the provision around mine closures as there was no provision about what the Social and Labour Plans (SLPs) kicking in when a mine went into business rescue. Barriers of entry into mining by junior and emerging mine companies were also another issue the Committee could mandate DMR to investigate. The conflict around compensation when a mine disrupted the occupation of the surface occupiers had also been something that had emerged acutely in the last 15 years. SA’s legal system remained without a satisfactory way of determining what would be due to communities when their activities were disrupted by Coal, Platinum or Copper mining which could be an area of investigation by the Committee.
 
There was also the need to amend compensation legislation for occupational health for mine works that contracted pulmonary diseases. Though the DMR had promised to have completed the amendments by 2016 December; that had not occurred yet. For Dr Nicol; the mining Phakisa was a more interesting issue to follow as there had been a lot of work done on what the challenges in the mining sector were and what stakeholders could do to resolve said challenges. Finally, other issues related to South African Mineral Resources Administration System (SAMRAD) - the monitoring and reporting of who owned mining rights in the country; fracking and the consultation of traditional leaders as opposed to affected communities were mining was taking place.

Selecting issue, making an impact
The proposed one year time frame for follow-up on implementation of recommendations from the Committee to DMR would allow the Committee to be able to judge whether it was being effective or not. However; from comparable foreign studies the support staff had found that it was difficult to measure Parliamentary Committee’s effectiveness. Effectively one way of measuring would be to have an operational plan that the Committee could keep referring back to.

Urgent issues
It was suggested that though the Committee would have urgent issues arising during planned investigations, it had to attend to urgent matters without disrupting planned work. Furthermore; though the Committee would be dealing with urgent matters as sub-agenda items it was suggested that the Committee had to avoid including dealing with too many urgent issues from the mining sector onto the agenda of planned investigations no matter how many there were.

Discussion
Ms M Mafolo (ANC) asked why the Committee Secretary would have to be mandated to communicate Committee resolutions to the DMR when its PLO was often at Committee meetings.
How would the Committee manage to avoid prioritising urgent issues in a way that they would not disrupt planned investigations?

Mr J Lorimer (DA) agreed with the suggested issues for investigation from junior mining company’s access to mining, closure of mines to compensation of surface occupiers.  He also liked investigating the Mining Phakisa, especially if it could include the issue of an absence of a proper regulatory assessment on legislation.

Adv. H Schmidt (DA) appreciated the economic background presentation as that gave the Committee a proper view of where SA was.
There was enough technological savvy in the Committee to be able to track progress on agenda items previously discussed. There was also a mining weekly online publication which the research section could compile from, for the Committee as it published policy related matter weekly.

The noise was becoming deafening around the granting of mining rights in environmentally protected areas. The Committee had to determine how DMR granted mining licences in environmentally sensitive areas.
On compensation when a mine disrupted activities of surface occupiers; there was a section in the MPRDA that obligated the Minister of Mineral Resources to compensate said occupiers, as their activities would have been interrupted by mining activities. However; the Committee was not aware how that process was determined including the computation of the monies.

Adv Schmidt agreed that the colloquium would be the best vehicle to deal with issues linked to agenda items of the Committee as he had received correspondence from the Rough Diamonds Dealers Association of South Africa, which he did not know how to respond to. It would be a good idea to have that association attending a colloquium so that the Committee could be aware what was happening in the diamond sector in the country.

Mr G Krumbock (DA) asked if the Committee could not consider 4-6 months after an item had been discussed that it would come-up again on the agenda as a follow-up; even if it would be a brief presentation of 10 minutes.

Mr I Pikinini (ANC) asked for more elaboration from Mr Kweyama on the trajectories of the economy of SA compared to that of the rest of the world.
He asked what the forthcoming legislations were that would be presented by DMR.
On investigation of mining closures the Committee had to ask itself what the role of inspectors was; especially relating that to mining disasters. He said that desktop inspections were proving to be ineffective.

Dr Nicol replied that the experience of the Committee was that though the DMR PLO attended Committee meetings, the Committee often did not receive follow-up responses from its resolutions from the DMR. Occasionally when the Committee Secretary wrote to DMR there would be responses but the support staff had a list of about 70 issues and resolution that had been raised in Committee and in the National Assembly (NA) which DMR had not responded to, to date. The support staff had then thought that a formal letter from the secretary after each meeting to DMR communicating Committee resolutions could provide a baseline on tracking responses.

He understood that the Committee worked in a political environment where emerging issues needed prioritisation, but his advice remained that the agenda on closure of mines be not completely replaced by the death of 31 illegal miners in the Free State. Just like the prioritisation of legislation that had to come before the Committee, planned investigations had to be similarly prioritised.  The Committee had bemoaned dealing with the same issues three years down the line, though it would have recommended actions for DMR three years previously.

Dr Nicol said he read Mining Weekly regularly and notably the Parliament library had recently subscribed to Research Channel Africa which provided access not only to mining weekly but also the annual surveys of iron ore, platinum, gold and other minerals production. The staff could make those papers available to the Committee but his concerns were that the volume of the material might be overwhelming. It was difficult for the support staff to prioritise issues for the Committee but the staff could experiment by possibly distributing five articles per week to Members.

Dr Nicol clarified that the regulatory impact assessment had been mentioned by DMR as an intention on its Annual Performance Plan (APP) for 2014/15 but had dropped off in the APP for 2016/17.

Mr Kweyama said SA’s growth rate was expected to lag the global and regional growth rates by more than 50%.  He further explained what the graph he presented showed, noting that the comparisons of growth rates were forecasted by the South African Reserve Bank (SARB), the International Monetary Fund (IMF) and National Treasury (NT) for three years. Though SA growth would be increasing it was not expected to catch up.

The Chairperson said his challenge was that the general public did not understand how Parliament Committees operated; especially that the Committee met once every week. It would also have been good if the background had spoken to the complexities of the mining industry historically up to the present challenges.
Previously when the Committee had held stakeholder engagement with four labour trade unions the Chairperson had received a letter from the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (CEPPWAWU) asking what criteria the Committee had used in determining who the stakeholders were. Recently the Chairperson had met an Association of Mineworkers and Construction Union (AMCU) representative who bemoaned Parliament’s invitation to DMR and the Chamber of Mines to speak on illegal mining without extending the same invite to labour unions.
He said the class litigation by ex-mineworkers against their former employers on unclaimed benefits and the suggested colloquium around such matters would have to carry through the entire week to allow every affected interest to have a say on such matters. 

The Committee had to first deal with the issue of an un-costed operational plan because Committees of Parliament currently were run on a zero budget. The potential was that funds could be exhausted before even moving on the operational plan since Committees had to seek permissions to fund its work.

Apart from the given examples to prioritise for investigations, could the Committee not receive a shopping list of all the issues that the mining sector was dealing with so that the Committee could then prioritise from that list matters that needed immediate attention. Though he was not against planning for 2019, it did not seem feasible to count that year as it could only be the first three months that Parliament would work and the rest of the year would be dedicated to elections campaigning.

It would also help to have a tracking system on matters arising so that they would not fall by the way side in subsequent meetings as that was an ongoing trend.     

He asked the support staff to supply the Committee with a consolidated list of stakeholders besides those that were always with the Committee, including the beefing up further of the operational plan to include matters of joint operations such as the illicit flows of income from the country which fell under trade and industry. That was because such matters were linked to illegal mining, meaning that the Committee could never in isolation deal illicit financial outflows.  Even the issues of ex-mineworkers required that the Committees on health and that of labour be roped in so that joint sittings could process such issues.
On many occasions, the Committee planned its work but intervening events took over and Parliament would insert other work for example, the Committee had planned undertaking a study tour but Parliament had replaced that with something else therefore his plea was that the operational plan had to have a flexibility element for intervening events which had been unplanned for.

To that stage the operational plan would have to be processed again when costs and the flexibility spoken to had been incorporated.

Oversight report to Gauteng, Mpumalanga and Limpopo on illegal mining
The Committee considered the report.

The Chairperson noted that on the issue of mining licences issued by traditional leaders; the Committee had recommended that there was a need for engagement with traditional leadership on what would constitute constitutional issuing of mining licenses for chrome mining; particularly on land in the custody of traditional leadership.
Additionally, the Committee had spoken to a need of strengthening of customs and duties control when chrome was leaving SA at the border gates.
 
Mr S Jafta (AIC) bemoaned the late circulation of oversight draft reports as that did not afford members time to properly interrogate drafts. He then seconded the adoption. 

The draft report was adopted with technical and grammatical amendments.

Adoption of Minutes
Minutes of Committee meeting held on 24 May 2017were adopted with substantive amendments relating to attendance of Committee meetings by Members.

Matters arising from the minutes
The Committee Secretary reported that since the rules of Parliament instructed that she write the EFF a notice that its representative had been absent for two consecutive meetings with no apology; she had indeed done so where the correspondence from the EFF officials had been that she had to take the matter up with Mr Floyd Shivambu, Chief Whip of the EFF. The rules of Parliament further instructed her that she send a copy of the adopted minutes of the 24 May 2017 and to then make follow-up thereafter.

iNkosi Mandela quoted:
38. Absence from meetings of Committee-
(4) The Secretary must every three months within a session submit a report to the Speaker on all members who have been absent from three or more consecutive meetings of a Committee without approval as recorded in the Committee’s minutes.
-had the secretary been sending such reports to the Speaker of Parliament?

The secretary said she had followed the same rule 38 but:
(3) The secretary to a Committee must without delay send a copy of the formal minutes of each meeting of the Committee to the responsible whip of each of the parties represented on the Committee.
-she said that subsection (4) which iNkosi Mandela had referred to was directed at the Secretary to Parliament and not herself as Committee secretary. Committee secretaries submitted attendance registers of each meeting to the Committee section which then submitted those registers to the Secretary to Parliament. She certainly could enquire whether the Secretary to Parliament had been forwarding those to the Speakers office.

The Chairperson said the challenge could also be found if the subsections/subrules were not read together as rule 38:
(1) A member may not without his or her party’s approval be absent from more than two consecutive meetings of a Committee to which the member has been appointed as a full member in terms of the rules.
(2) A member’s approved absence from a meeting of a Committee referred to in Subrule (1) must be recorded in the minutes of the meeting as formally adopted by the Committee.
- A further challenge was that the Committee had always been raising the issue as a concern and not a matter recorded in the minutes. The rules also stipulated that a whip of each member within the Committee had to be informed about the absenteeism of their respective member however; since the Committee recognised that there were parties that only had one member who could also be the whip of a particular party. The Committee had then instructed the secretary to follow the provision of rule 38 subrule (2).
The problem also was that the EFF secretary had given the Committee Secretary a verbal response that she approaches the EFF whip.  

iNkosi Mandela requested the Committee Secretary to thoroughly investigate all the Committees sittings since 2014 to see how the EFF had been attending so that a report could be produced where the Committee could send it to the whip of the EFF and to the secretary of Parliament so that it could reach the Speaker as well.

The minutes were adopted with substantive amendments relating to the attendance of EFF members of the Committee

Announcements
The Chairperson said that officially Committees could not undertake oversight or study tours as the President of the country would be answering questions on 22 June 2017. Therefore, the Committee had been requested to consider the weeks of 29 July - 5 August or 7 - 12 August 2017. The Management Committee (MANCO) had decided proactively that the support staff had to prioritise and prepare a study tour to Australia as it had more in common with SA’s mining industry. Alternatively, Russia, Canada or the United States of America (USA) could be considered.  

There would be a joint meeting on the 21 June 2017 with portfolio Committees on Police, Finance and Trade and Industry on the fight against illicit financial flows from SA where the South African Police Service would be briefing the Committees.

The following week of the 26 June 2017 the Committee would be on oversight to the North West.

iNkosi Mandela supported the announcements as reported by the Chairperson for implementation as planned.

Mr Jafta said the MANCO could go ahead with the plans as relayed.

The Chairperson thanked the Committee and the meeting was adjourned.
 

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